Congestive heart failure (CHF) is a common and devastating disease; more than one-fifth of Americans alive at age 40 develop CHF at some point in their lifetime, and 50 percent of patients with CHF die within 5 years of diagnosis. It is also extraordinarily expensive to treat, with direct costs exceeding $39.2 billion annually in the United States. High-quality outpatient care has been proven to improve outcomes and prevent hospital readmissions for patients with CHF, and understanding how to optimize outpatient CHF management is a critical clinical and policy problem. The first aim of this project evaluates the impact of outpatient cost-sharing (co-payments and co-insurance) on Medicare patients with CHF. Outpatient cost-sharing may reduce the use of unnecessary medical services and thus reduce expenditures affecting patient health, but evidence suggests that for chronically ill patients, it may lead to patients deferring effective medical care, resulting in worsened health and higher overall expenditures. Among patients with CHF, a particularly medically vulnerable population, the effects of outpatient cost-sharing on patient outcomes and overall cost are unknown. This aim will be explored by using panel data from the Medicare Current Beneficiary Survey to construct a long-term (3 year) dynamic model of CHF patient behavior - one in which a patient's health care decisions early in the model affect both their subsequent health status and need for medical care. The second aim focuses on the role of echocardiography (cardiac ultrasound) in the ongoing management of CHF. Echocardiography is the standard imaging technique for the diagnosis of CHF. However, its role in the ongoing management of patients with CHF is unknown, particularly how the use of outpatient echocardiography in patients with a recent CHF- related hospitalization might affect disease management and prevent subsequent re-admissions. Using a large (20%) sample of Medicare beneficiaries, patients hospitalized with CHF, will be identified. Using a combination of Medicare claims, each patient's post-hospitalization health care use will be characterized, including the use of outpatient echocardiography. A small area variation instrumental variable approach will be used to estimate the effect of echocardiography use on the probability the patient will be re-admitted for CHF within 6 months of their initial CHF-related stay. A novel instrumental variable approach called local instrumental variables analysis will allow for the correction of unobserved selection bias even in the setting of a heterogeneous treatment effect, a known limitation of conventional instrumental variable analyses. The results of these analyses will provide relevant data for both clinical and policy decision-making for patients with CHF.